Apply the 80/20 Rule ... Everywhere

The Pareto principle (also known as the “80/20 Rule”) states that, for many events, approximately 80% of the effects come from 20% of the causes.

In the early 1900’s, Vilfredo Pareto determined that 80 percent of the land in Italy was owned by only 20 percent of the population, and so it began.  Nearly 100 years later the theory still held true:

1. ^ Human Development Report 1992, Chapter 3, http://hdr.undp.org/en/reports/global/hdr1992/chapters/, retrieved 2007-07-08 

So why does this matter for Nonprofit marketers?

Simply stated, this premise provides us context that the large majority of outcomes comes from a small minority of inputs.  More specifically, in the fast-paced marketing world in which we operate, framing our context around this principle can help to ensure we are focusing on things that matter most. 

What if we focused fundraising efforts around questions and outcomes such as:

• If 80% of your revenue comes from 20% of your donors (and it does) – Treat them better!
• If 20% of your campaigns generate 80% of the donor complaints you receive – Change them!
• If there are a few elements of your solicitations that you can never live without – Make them even better!

For a moment, I will build on the last point because this is likely an opportunity that every organization, large or small, newly established or mature has in common.

That element of solicitation commonality is your organizational brand.  Your brand is the constant in every communication piece and is likely a big influencer of results.  For great organizations, your brand creates instant credibility.  This credibility gets your envelope or email opened before others in a crowded mailbox or inbox.

At the close of your next strategic planning session, review the outcomes and ideas and ask yourselves these questions:

1)     Have we built a brand that gives us instant credibility?

2)     Do we have a value proposition that resonates with our key audiences?

If the answer is “no” then maybe it's time to step back and determine what’s important.  What is your 80 and who is your 20?

-Josh Whichard

Josh is the Senior Director of Applied Strategy in Merkle's nonprofit vertical.  He chooses to Do What Matters because "there should be no tolerance for following the status quo just because it's 'how we've always done it'".  You can follow him on Twitter @JWhichard.

Comments

[Raffle Expert]

I agree with the premise of the post. I've seen it at work particularly with respect to what Malcolm Gladwell would call "influencers." These are the 20% of your relationships that garner 80% of your results. Just as you spend time with your best donors, spend time with those who have those donor connections.